Monday, 5 June 2017

Near War in the Persian Gulf



Baltic Dry Index. 830 -20    Brent Crude 50.60

"Anytime you don't want anything, you get it.”

Calvin Coolidge, 30th President of the United States.

We open today with truly shocking news from the Persian Gulf. President Trump hold off on selling off half of the US Strategic Petroleum Reserve. Is a new war about to start in the world’s leading oil and gas fields?  Four days out from the UK general election will Qatar trigger its UK-Qatar Defence Cooperation Agreement?

Below, the giant rift in the Gulf which could have some truly massive implications in the markets if the regions sovereign wealth funds have to start selling.

Saudi Arabia, Bahrain, UAE sever diplomatic relations with Qatar

Published: June 5, 2017 12:38 a.m. ET
DUBAI—Three Persian Gulf countries cut off diplomatic ties with Qatar on Monday, accusing their neighbor of meddling in their internal affairs and backing terrorism.

The move by Saudi Arabia, the United Arab Emirates and Bahrain marks a sharp escalation of a rift between the Persian Gulf states since late last month.

Qatar’s state-controlled news agency posted comments purportedly by its emir on May 24 that praised Iran and called Hamas the legitimate representative of the Palestinian people. The country said its state news agency had been hacked, but Saudi Arabia, the U.A.E., Bahrain and Egypt nevertheless blocked the websites of several Qatari news outlets.

Oil Jumps on Qatar Isolation; Bonds Rise With Gold: Markets Wrap

4 June 2017, 23:12 GMT+1 5 June 2017, 05:18 GMT+1
Oil jumped after four Arab countries cut ties with Qatar, while yields on Australian bonds joined Treasuries at a seven-month low in the wake of a weaker-than-expected U.S. employment report. The pound slipped after a terror attack in London.

Crude climbed as the action against Qatar escalated a crisis that started over its relationship with Iran. U.S. and Australian bonds rallied as wage growth and hiring strength in the American labor market came in below forecasts. The peso reversed losses on signs the ruling PRI was pulling ahead in the governor’s election for the key state of Mexico.

Saudi Arabia cited Qatar’s support of “terrorist groups aiming to destabilize the region,” including the Muslim Brotherhood, Islamic State and al-Qaeda. Investors weighed the implications of the latest terror incident at a popular London nightlife spot, as Britain’s battle with jihadists looked set to dominate the final three days of the election campaign.
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Saudi Arabia, Egypt, UAE, & Bahrain Cut Diplomatic Ties, Shut All Borders With Qatar


by Tyler Durden Jun 4, 2017 11:20 PM

----The statement on Monday morning said Bahrain decided to sever ties with its neighbor “on the insistence of the State of Qatar to continue destabilizing the security and stability of the Kingdom of Bahrain and to intervene in its affairs”.

The statement also said Qatar’s incitement of the media and supporting of terrorist activities and financing groups linked to Iran were reasons behind the decision.

“(Qatar has) spread chaos in Bahrain in flagrant violation of all agreements and covenants and principles of international law Without regard to values, law or morals or consideration of the principles of good neighborliness or commitment to the constants of Gulf relations and the denial of all previous commitments,” the statement read.

Qatari citizens have 14 days to leave Bahraini territories while Qatari diplomats were given 48 hours to leave the country after being expelled. Meanwhile, Bahrain has also banned all of its citizens from visiting or residing in Qatar after the severance of ties.

Additionally, Bahrain has has closed both air and sea borders with Qatar.

Saudi Arabia then confirmed the same - cutting ties and shutting down all sea, airspace, and land crossings with Qatar as well as dissolving Qatar's role in the Saudi-led coalition fighting against Yemen. Emirates, Etihad, Saudia, Gulf Air, and Egypt Air are no longer allowed to fly to Qatar and Saudi Arabia is providinhg facilities, services to Qatari pilgrims

Egypt then followed, confirming it was cutting diplomatic ties with

Then UAE confirmed it would cut ties, shut down all sky, water, and land crossings, and expel all Qataris within 48 hours.

The Maldives also just cut diplomatic ties with Qatar.

All of this happens within 24 hours of Iran calling out 'The West' for ignoring the real sponsors of terrorism around the world and UK's Labor party leader outright name-shaming Sauid Arabia's funding of terrorism.

Qatari officials did not immediately respond to a request for comment.

As a reminder, documents obtained by Middle East Eye show strategic alliance includes pledge by Ankara to protect Gulf state from external threats...

In December 2015, Turkey announced, to the surprise of many, that it planned to establish a military base in Qatar. Behind the scenes, the agreement was about forming a major strategic alliance.

After a 100-year hiatus, Turkey is militarily back in the Gulf and ramping up its presence overseas. In January, Ankara announced that it would also establish a military base in Somalia.
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Qatar–United Kingdom relations

----Britain and Qatar signed a Defence Cooperation Agreement in November 2014. Britain’s Royal Air Force has an air base in Qatar known as Royal Air Force Al Udeid, located 17 miles south west of Doha.
The facility served as a station for British air operations in support of Operation Telic and Operation Herrick - the designations for British operations in Iraq and Afghanistan respectively. As of 2015, the air base is being used as a headquarters for British forces involved in Operation Shader, the UK's military intervention against ISIS in Iraq.[10][11]

In February 2014, the Royal Navy warship HMS Monmouth hosted NATO delegates in the port of Doha in Qatar.[12]

Qatari cadets attend the Royal Military Academy Sandhurst each year, and the current Emir of Qatar, Sheikh Tamim bin Hamad Al Thani, is a Sandhurst graduate.[13]

British military also provide officer training to Qatari forces in Qatar.[14]
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We close for the day with bad news for Bitcoin and good news for gold.

Raoul Pal Slams Bitcoin: “It’s Not The Store of Value People Thought It Was” - Peter Diekmeyer

Raoul Pal, one of the most effective critics of mainstream economics, is cashing in his Bitcoins. Gold is a better wealth preservation tool, says Real Vision Television’s co-founder.

Yesterday Pal, who once thought that Bitcoins could eventually be worth as much as $1 million each, informed Real Vision Publications subscribers that he was selling the digital currency.

“Bitcoin not a store of value people thought it was,” he told Sprott Money News, in a telephone interview this morning from his Cayman Islands home. “If core developers are talking about changing the Bitcoin code or how it works, what happens if – at some future point – they decide to allow the number of coins to expand?”

Pal also cited lack of a Bitcoin “killer app,” and the commoditization of blockchain technology – as new players chip away at the market – as motivating his thinking.

---- Mainstream economics “does not work in the real world”

However, Pal’s dimming view of Bitcoin is particularly important to gold investors, because he and partner Grant Williams, in their legacy platforms and the recently-launched Adventures in Finance podcast series, have been among the global financial system’s most astute critics.

Pal is particularly vociferous about the opaque econometric models pushed by mainstream academics and central bankers, who don’t sufficiently warn the public of the dangers involved.

He cites economists’ use of the qualification “ceteris paribus” (which means “all other things being equal”, but which, Pal jokes, really means “it does not work in the real world”).

This, despite the fact that while insiders understand the jargon, profession politicians and the public are left insufficiently informed by economists about the risks of policies such as rising debts and quantitative easing.

Bitcoin: like gold, except . . .

Pal’s call is also important for another reason: if Bitcoin’s allure as a store of value and a hedge against systemic collapse is dimmed, this would increase the relative value of other solutions.

That includes gold, for which Pal’s partner Grant Williams has been a particularly strong backer.

Pal’s fascination with Bitcoin echoes that of many alternative investors, who seek a hedge from what some suspect is a “Krugman Con” - sustained long-term increasing government spending, borrowing and money printing at a pace that exceeds economic growth.

Bitcoin met many of those hedging characteristics. Despite its wild fluctuations, the digital currency provided a partial store of value outside the banking system and its encryption technology reportedly kept away prying eyes.

Bitcoins fraught with increasing risks

However Pal’s concerns with the digital currency barely scratch the surface of the increasing risks that Bitcoin investors face – particularly at a time when its hockey stick chart pattern practically screams “bubble.”

----These range from how data mining (the process through which Bitcoins are created) is done, to who is behind the various Bitcoin exchanges (this writer could not find a single Canadian operator to speak on record for a recent article), and how good the platform’s encryption is.

(Note: America’s National Security Agency, which few journalists fully understand, is almost certainly making hacking digital currencies its number one priority. In fact, (in this writer’s opinion) it has likely already succeeded).
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"As fewer and fewer people have confidence in paper as a store of value, the price of gold will continue to rise. The history of fiat money is little more than a register of monetary follies and inflations. Our present age merely affords another entry in this dismal register."

Hans F. Sennholz

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
No crooks or bent banksters and politicians today, just the opposite. Today an anti-cancer drug development, released on Saturday that due to other events on Saturday, probably meant it didn’t get the coverage it deserved.

Drug targeting genetic defect shared by different cancers succeeds in shrinking tumors

Published: June 3, 2017 11:55 a.m. ET

Lives are being changed forever’ by Loxo Oncology’s experimental larotectinib, according to lead researcher

CHICAGO -- An experimental drug shrank tumors in patients with a variety of cancers sharing the same genetic defect, new studies found, part of a push in oncology research to treat tumors by their molecular traits regardless of where they are in the body.

Loxo Oncology Inc.’s LOXO, +3.95%  drug, larotrectinib, was tested in patients who had one of 17 different types of cancer at an advanced stage, including rare ones like salivary-gland cancer and more common types like colon and lung cancers.

The tumors had a rare genetic abnormality known as tropomyosin receptor kinase, or TRK fusion, which is estimated to occur in just 1% of many common cancers. Normal TRK proteins play a role in controlling a person’s balance, but when TRK genes fuse to other genes, they can contribute to tumor cell growth. The genetic defect is detected in tests of tumor samples taken from biopsies of patients.
Larotrectinib is designed to inhibit TRK fusions. Three Loxo-funded, early-stage studies with an aggregate total of more than 50 patients found that 76% of them experienced tumor shrinkage after receiving the Loxo drug, and that most of the patients were still responding to the drug 12 months after starting treatment. The most common side effects in patients were fatigue, dizziness and nausea.
Results of the studies were released Saturday at the annual meeting of the American Society of Clinical Oncology, a large gathering of cancer doctors.
An expanded version of this article appears at WSJ.com.
Technology Update.
With events happening fast in the development of solar power and graphene, I’ve added this section. Updates as they get reported. Is converting sunlight to usable cheap AC or DC energy mankind’s future from the 21st century onwards? DC? A quantum computer next?

Low cost, scalable water splitting fuels the future hydrogen economy

Date: May 31, 2017

Source: Penn State Materials Research Institute

Summary: An efficient, low-cost catalyst could replace platinum in water-splitting for clean hydrogen production.

The "clean energy economy" always seems to be a few steps away but never quite here. Most energy for transportation, heating and cooling and manufacturing is still delivered using fossil fuel inputs. But with a few scientific breakthroughs, hydrogen, the most abundant element in the universe, could be the energy carrier of a future clean energy society. Taking one step closer toward the elusive goal, a team of scientists from Penn State and Florida State University have developed a lower cost and industrially scalable catalyst to produce pure hydrogen through a low-energy water-splitting process.

"Energy is the most important issue of our time, and for energy, fuels cells are crucially important. And then for fuel cells, hydrogen is most important," says Yu Lei, a doctoral candidate at Penn State and first author of a new paper in ACS Nano describing the water-splitting catalyst she and her colleagues theoretically predicted and synthesized in the lab. "People have been searching for a good catalyst that can efficiently split water into hydrogen and oxygen. During this process, there will be no side products that are not environmentally friendly."

The current industrial method of producing hydrogen -- steam reforming of methane -- results in the release of CO2 into the atmosphere. Other methods utilize waste heat, such as from advanced nuclear power plants, or concentrated solar power, both of which face technical challenges to becoming commercially feasible. 
Another industrial process uses platinum as the catalyst to drive the water-splitting process. Although platinum is a near-perfect catalyst, it is also expensive. A cheaper catalyst could make hydrogen a reasonable alternative to fossil fuels in transportation, and power fuel cells for energy storage applications.

"Molybdenum disulfide (MoS2) has been predicted as a possible replacement for platinum, because the Gibbs free energy for hydrogen absorption is close to zero," says Mauricio Terrones, professor of physics, materials science and engineering and chemistry at Penn State. The lower the Gibbs free energy, the less external energy has to be applied to produce a chemical reaction.

However, experimentally, there are drawbacks to using MoS2 as a catalyst. In its stable phase, MoS2 is a semiconductor, which limits its ability to conduct electrons. To get around that problem, the team added reduced graphene oxide, a highly conducting form of carbon. Then, to further decrease the free energy, they alloyed the MoS2 with tungsten to create a thin film with alternating graphene and tungsten-molybdenum disulfide layers. The addition of tungsten lowers the electrical voltage required to split water by half, from 200 millivolts with pure MoS2, to 96 millivolts with the tungsten-molybdenum alloy.

----"What happens in these alloys is an exquisite overlap of orbitals which makes the reaction more efficient. This is not observed in the pure components. It is an example where the hybrid is better than the pure components," says Jose L. Mendoza-Cortes, professor of chemical engineering, materials science and engineering and scientific computing at Florida State.

Hydrogen fuel cells can boost a clean energy economy not only in the transportation sector, where fast fueling and vehicle range outpace battery powered vehicles, but also to store electrical energy produced by solar and wind. This work is another step forward to reaching that goal.

The monthly Coppock Indicators finished May

DJIA: 21,009 +157 Up. NASDAQ:  6,199 +219 Up. SP500: 2,412 +161 Up.

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